Living the Dream -Live E-Seminar / Conference Call

Transcription

1 September 15, 2010 Living the Dream -Live E-Seminar / Conference Call Fighting Battles: Partners, Potential Foreclosure and The IRS Host: Mat Sorensen, Attorney at Law Special Guests: Mark Kohler, CPA, Attorney At Law Kenny Childs, Attorney at Law Lee Chen, Attorney At Law Telephone Facsimile KKO Lawyers, LLP Telephone Facsimile Kohler & Eyre CPAs, LLC Telephone Facsimile NumberWon Accountants, LLC 2010

2 What we will cover Today I. How to prevent and avoid a law suit II. What to do in a business deal gone bad III. What to do if I have a property going into Foreclosure IV. Debt Forgiveness and Deficiency Judgments V. Dealing with the IRS and trying to settle for pennies on the dollar

3 How to prevent and avoid a Lawsuit - Documenting everything from the beginning of the relationship - Setting proper expectations - Planning for worst case scenario - Proper business structure - Communication when problems occur

4 What to do when a deal goes bad - Build your case file - Get a legal consultation immediately - Demand letters - The differences between Mediation, Arbitration and Court

5 The Initial Decision Do you want to keep the property? Do you want to get rid of the property?

6 Keeping the Property The realities of qualifying for a Loan Modification Your credit score Hardship realities Decreasing the negative cash flow: Lease Option Subject to sale

7 Getting Rid of the Property Short Sale: You sell the property, with approval of the lender, for less than the loan balance owed to the lender. The lender generally promises to forgive or discount the remaining loan balance. Deed in Lieu of Foreclosure: You transfer the property deed over to the lender, in return for a promise to forgive or discount the remaining loan balance. Foreclosure: If the Loan Mod or Short-Sale is not approved Foreclosure is inevitable- Be prepared.

8 Cancellation of Debt Income May Arise in connection with Loan Modifications, Short-Sales, Deeds In Lieu of Foreclosure, & Foreclosures. Lender has a duty to issue 1099-C. Mortgage Debt Relief Act of 2007 excludes income from discharge of debt on principle residences (not HELOCs) Bankruptcy or Insolvency Form 982 Publication 4681

9 Deficiency Judgments What is a Deficiency? Anti-Deficiency Statutes Calculating the Deficiency Asset Protection Beware of Fraudulent Transfers

10 What are my options when dealing with the IRS? 1. Abatement of tax penalties. 2. Installment Agreements. 3. Currently not collectible. 4. Offer In Compromise. 5. Innocent Spouse Relief 6. Bankruptcy 7. Wait out the Statute of Limitations

11 Options available to me when I have little or no money Dealing with the IRS when you have no money can be fearful but may work to your advantage. Specifically, you have the option to: (1) request that you be put in a non-collectible status, (2) request an Offer in Compromise, (3) file bankruptcy, (4) Let the IRS hash at your credit until the statute of limitations expires on the tax owed.

12 Are you in a position to settle with the IRS? - Filed all tax returns for the last 6 years including 941 s. - Exercised all appeals to get a final determination of the tax. - Determined how much of the tax bill you can afford to pay. - Calculated beforehand how much income you are receiving a month and subtract that amount from all necessary expenses.

13 The Truth about an Offer in Compromise - You must also submit with the offer a $150 payment and your first offered installment payment. Both of these are non-refundable. - Your offer may be one of two options: (1) a lump sum payment of 5 or less payments or (2) a periodic payment of 6 or more payments not to extend beyond the statute of limitations. - The Offer to get approved typically takes anywhere between 6 months and a year. - The typical amount that the IRS will accept is your monthly disposable income multiplied by 48 for a lump some payment or 60 for periodic payments.

14 What does non-collectible Status mean? - Allows you to stop the IRS from collecting the tax from you and stops those frustrating levy s and garnishments. - You qualify for non collectible status if: - You have a hardship - Corporation is remaining in business and has the ability to pay but will put it out of business if it pays - Death of taxpayer with no significant estate - Filing of Bankruptcy

15 Bankruptcy Bankruptcy will also put a stay on the collection process preventing the IRS from placing further liens, levy s, or garnishments on your property If the tax has been in collection status for more then 10 years the IRS must cease collection of that tax. While Bankruptcy will not get rid of all types of taxes it can get rid of Personal taxes owed as long as certain conditions exist such as the tax has been owed for a period of 3 years or more.

16 Statute of Limitations Believe it or not but the IRS has rules that somewhat protects the taxpayer. If the tax has been in collection status for more then 10 years the IRS must cease collection of that tax. TIP: file your tax return. If you never file your tax return then this 10 year rule doesn t begin until the IRS begins collecting. BE AWARE: filing for an Offer In Compromise or tolling it by appealing the tax will stop the 10 year Statute of Limitations during the period that the offer in compromise is under review.

17 September 15, 2010 Living the Dream -Live E-Seminar / Conference Call THANK YOU!! Telephone Facsimile KKO Lawyers, LLP Telephone Facsimile Kohler & Eyre CPAs, LLC Telephone Facsimile NumberWon Accountants, LLC 2010